Bitcoin Price: 5 Things To Watch This Week!

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Another Fed rate hike is around the corner, a reduction in mining problems and an improvement in market sentiment. The week promises to be tumultuous for bitcoin. Without further ado, here are 5 things the cryptocurrency mother should pay attention to this week. Elements that can be easily used throughout the cryptographic universe.

The Fed continues to exert its full influence on risky markets!

In his wild race against inflation, The US Federal Reserve will announce another interest rate hike. The market expects it to be between 75 and 100 basis points. And this could have new implications for equity markets such as digital assets. Especially when the measures differ from those expected. The FOMC Fed will meet July 26-27 to make a decision. Nobody doubts that these announcements will once again be the benchmark for the markets this week. The July 27 session could be marked by increased volatility in the cryptocurrency market.

According to many observers, central banks are sailing in troubled waters today. Between the desire to fight inflation, but also risk of recession exert pressure on economies around the world. Today it appears that monetary policy decisions are the biggest factors influencing the price of risky assets like bitcoin.

A few days ago, the US central bank imitated the European central bank, which then raised interest rates by 0.5 basis points. For the first time in 11 years! It should be remembered that inflation in the United States, as well as in the Eurozone, has reached almost 10%. An alarming level that prompted the Fed to raise rates by 75 basis points in the last meeting in June. An increase that has not been recorded on this scale since 1994. Although price increases have long been considered temporary, they seem more permanent to include in the list of variables to be considered.

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BTC Mining Difficulty Declined Again!

Bitcoin mining is essential for the blockchain to function properly. Mining difficulty measures the competition that may exist between minors configured based on network participation. The difficulty has been decreasing for almost a month. The element is partly due to the weakness of Bitcoin’s price. Low prices, which inevitably lead to a decline in interest in mining. And through the setting, reducing the complexity of mining. It is now reaching levels not seen since March.

The protocol recently reduced mining difficulty by 5%, the biggest drop since May 2021. Another drop is also expected within ten days. Maybe around 2%. The next few days are expected to be decisive.

Good to know : If the mining difficulty decreases, it means that mining requires less energy as competition from other miners is reduced. While this sounds like environmental good news, it’s not necessarily good news for the Bitcoin ecosystem.

Despite bitcoin’s extremely low price, there is still a desire or need for sellers to reveal them. As CryptoQuant data shows, miners sent 909 BTC to the markets in yesterday’s session. This is the highest number since June 22, despite a 5% decrease in difficulties.

Fighting the 200 Week Moving Average!

Bitcoin has seen more than a few weeks in the past week. But that wasn’t enough to maintain a significant level: $ 22,800, 200-week moving average. As shown in the graph below taken from the Tradingview platform:

While this level is critical for some, for others, moving above this moving average won’t do much. In any case, this is the opinion of the Crypto Chase Twitter account, which, if successful, assumes that this will be broadcast. resistance levelthe increase will remain relatively modest.

Bitcoin MVRV-Z Score

The MVRV-Z (Market Value at Realized Value) score measures the difference between the present value and the realized value of an asset. In other words, it is a matter of judgment if the asset is overbought or oversold relative to its “fair price”.. Among traders, this indicator is also used very often, like other similar variables.

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During the day, this value turned negative again, which could indicate a drop in the price. And it hasn’t failed, as bitcoin has dropped 3.51% in the past 24 hours. Investors will be keeping an eye on this indicator in the coming days. In early July, the Cointelegraph platform released a report on this indicator in relation to Bitcoin. The mother of the cryptocurrency was then threatened with a return to the $ 15,600 threshold.

The importance of market sentiment!

This variable seems to show positive signs for some sessions. The cryptocurrency fear and greed index, which has been below 10/100 for a long time, has regained color in the past few days. Recall that during this bear market it was in the Extreme Fear category for 73 consecutive days, i.e. at levels from 0 to 25/100. In mid-June it even hit the index’s 6/100 mark in the past 3 months:

This shows that the indicator is developing to a level that hasn’t been seen for nearly 3 months. The peak was reached at the end of last week. At the time of writing, this index was from measure of market sentiment reading at 30/100 Although still at the level of “fear”, the optimism seems to be returning. Also this week will be a variable to consider.

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